How does Virginia McGuire make a profit in the nonprofit business of creating affordable housing? Simple. She pays her husband.

At that time in 2000, rumors were floating around Williams Run that the complex was going to be sold and converted to low-income housing, according to several tenants, who say they asked the on-site property managers to confirm the rumors and were repeatedly told they weren't true. If they had known about the hearing, the tenants say they certainly would have attended.

Despite the hearing's importance, state rules did not require notice to be posted in plain view for everyone to see, such as signs tacked up in common areas at Williams Run or even at the nearby Samuell Grand Recreation Center, where the hearing was supposed to take place on September 7, 2000. Instead, a notice was posted five miles away from Williams Run, at the Casa View branch library, as well as in a fine-print advertisement placed in the Texas Register and TheDallas Morning News.

When the hearing started, there were only four people in attendance: Virginia and Scott McGuire, along with state Representative Harryette Ehrhardt and a TDHCA representative. An aide to U.S. Representative Pete Sessions arrived just minutes after the hearing was scheduled to begin, only to discover that it was already over.

Mark Graham

Virginia McGuire, whose tiny nonprofit is using government money to buy apartment complexes, says she can provide affordable housing and pay her husband's company hundreds of thousands of dollars, too.

Mark Graham

Former tenants Hal Barker, left, and Ted Barker, standing outside the Williams Run apartments, say they felt compelled to dig into the details of the complex's sale. "They destroyed a marvelous community," Ted says.

"The meeting, to the best of our knowledge, did not occur," Sessions says, adding, "For anyone to say that the process was fair or even followed, they would not be telling the truth."

Nonetheless, Virginia McGuire showed up in Austin five days later and assured members of the Bond Review Board that the hearing took place and there was no opposition to the project.

"It was a very calm TEFRA hearing," said McGuire, who can be heard laughing as she addressed the board, according to an audiotape recording of the meeting.

The truth was, Williams Run residents didn't know there was any proposal on the table, and McGuire confirms she did nothing to ensure that the tenants heard about the hearing. When asked why not, she asks why she should have.

"If you go out and buy the apartment complex right down here," she says, pointing out her window, "do you notify all the tenants that you're thinking about buying that apartment complex?"

When the residents finally realized what was happening--an understanding that came after the state approved the project and too late for them to have any impact--they were very much opposed. Some were outraged that they'd been kept in the dark about the nature and timing of the project. Worse, they say, their further attempts to get straight answers about how the sale would affect them were met with accusations that they were elitist.

"It was just absolute bullshit," says former resident Paul Hall, a federal criminal investigator who had lived at Williams Run for three years. Hall, who spent several years working for the Peace Corps in Guatemala, says he was especially offended by the suggestion he didn't want to live near poor people. "It is just an avenue they're pursuing to divert attention away from the real problem, which was them."

Hall is one of several former tenants who signed sworn affidavits attesting to the chain of events that took place at Williams Run that summer and fall. Those affidavits, combined with tenant interviews and documents the Dallas Observer has obtained, appear to support the tenants' complaints that they were deceived--a pattern that gained momentum shortly after the state formally approved the bonds on September 21, 2000.

As part of the bond requirements, McGuire had to demonstrate to the state that 40 percent of the complex's tenants earned 60 percent of the median income for the area or less. (For a single person, that translates to an annual income of $27,060 or less, or, for a couple, a combined annual income of $30,900.) To do that, McGuire had to submit "tenant income certification" forms, signed by the tenants, to the state by December 6, 2000, the day the sale closed. The easiest way to do this would have been to give the tenants a copy of the three-page form, along with a letter explaining why the information was needed. But that isn't what happened.

That fall, tenants received two curious fliers. In the first, they were told a representative would be contacting them to see if they qualified for a "concession" on their current lease. The concession was based on a "tax credit," the flier stated.

Weeks later, the residents got another, more tantalizing offer.

"'Win' Everyone Likes to WIN!!!" the second flier announced. It went on to say that Williams Run had begun a "new program" that could benefit some residents based on their income. The flier offered residents free rent or Dallas Cowboys tickets; all they had to do was fill out the attached form. It turned out to be the first page of the state's three-page income certification form.

"The reason we are requesting this information is to update our resident files," the flier stated.

The residents were not told Williams Run was in the process of being sold or that the new owners were required to gather and submit the tenants' personal financial information to a third party, in this case, the state. To former resident Ted Barker, who lived at Williams Run in an apartment near his younger brother Hal, the offer of a rent break was too good to pass up.